WorkCover Authority of New South Wales (Inspector Egan) v Bituminus Products Pty Limited

JUDGMENT: - 7 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION

WORKCOVER AUTHORITY OF NEW SOUTH WALES (INSPECTOR EGAN) v BITUMINOUS PRODUCTS PTY LIMITED Prosecution under s15(1) of the Occupational Health and Safety Act 1983

1 Judgment in this matter was given on 16 March 2001 (WorkCover Authority of New South Wales (Inspector Egan) v Bituminous Products Pty Ltd [2001] NSWIRComm 43). In defended proceedings, the defendant was found guilty of the offence charged under s15(1) of the Occupational Health and Safety Act 1983 ('the Act'), except as to particular (a) of the charge. This judgment deals with the question of penalty.

2 The defendant called Mr Bradley to give evidence as to the nature and size of the defendant's operations and its commitment to safety matters. A number of documents were also tendered.

3 Mr Chin of counsel, appearing for the prosecutor, submitted that the approach discussed by the Full Court in Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 at 474-6, was that to be followed in the case of sentencing. Penalty was to be determined having regard to the objective seriousness of the offence, having regard to its nature and quality and the degree of foreseeability of the risk involved. As to the latter, it was the gravity of the potential risk, to which attention must be paid, rather than the actual harm done.

4 Here, so it was submitted, the objective seriousness of the offence would be found to be high, because the risk of ignition resulting from proximity of a source of ignition to flammable vapours, was readily foreseeable. The consequences of that risk were described as potentially catastrophic for those involved in the accident and it was submitted that the minor injuries sustained by one worker, in the circumstances, was but a lucky break.

5 Particularly relevant to this assessment were the findings that the defendant had relied upon an inappropriate method of detecting the presence of vapours by smell alone.

6 These circumstances were compared with those dealt with by Hungerford J in WorkCover Authority of New South Wales (Inspector Hannan) v Bitupave Ltd t/a Boral Asphalt (No 2) (2000) 101 IR 458. There the maximum penalty available was $500,000 for each offence charged. Hungerford J fixed penalties of $255,000 in total, with $170,000 for the system of work charge and $85,000 for the instruction and training charge, the prosecutor having submitted that a mid-range penalty for each offence was appropriate, although there was room for the view that a penalty above that level was warranted. It was submitted that the penalties imposed in Boral (No 2) would here provide the Court with some guidance as to the appropriate penalty to be imposed, although it was submitted that while here the circumstances were serious, such as to warrant a substantial penalty, they were not such as to warrant a high one. Nor, however, was a low penalty submitted to be appropriate. Otherwise, penalty was submitted to be a matter for the Court.

7 As to the maximum penalty available, it was submitted to be $825,000, when consideration was given to the effect of s51A of the Act, the defendant having one prior conviction under the Act, with an earlier conviction under the Dangerous Goods Act 1975.

8 Mr Reitano of counsel submitted for the defendant, that the circumstances here in question were not at all comparable to those considered by Hungerford J in Boral (No 2). There his Honour was called upon to consider a substantial explosion which occurred after an employee inserted a dipstick while on top of a spray tanker containing molten bitumen being sprayed on a road surface at high temperatures. A significant amount of flammable vapours had been created in the tank, after cleaning of spray lines had been conducted, using a solvent, pumped through the lines under pressure. Those vapours had been released from the tank, in a chimney effect, when the employee had measured the level of the bitumen left in the tank, causing the vapours to engulf the employee and to be ignited by an unidentified source.

9 Here, by way of contrast, the circumstances involved the cleaning of cold bitumen from a cold vessel at a factory, in circumstances where but a relatively small amount of flammable vapours were present, undetectable by smell and sufficient to cause but a short, sharp explosion. It followed that the gravity of the two offences were entirely different, as was the foreseeability of the consequences of the respective work methods adopted in the two situations.

10 Unlike Boral (No 2), it here could not be accepted that the evidence properly led to the conclusion that the consequences of the defendant's failures were potentially as described by the prosecutor. It was accepted that any breach of the Act was serious, but it was submitted that what was here required, was a proper assessment of where the seriousness of the defendant's particular offence rested.

11 As to the assessment of the penalty to be imposed, it was submitted that account would be taken of the fact that the defendant had been in business for some 32 years in an industry which required high volumes of hot bituminous products to be handled. It operated at its factory at Revesby, where some 13 employees were engaged (including office staff), and in 5 other locations in Western Australia, Victoria and Queensland, where about 8 other employees were engaged. It was submitted to be a remarkable record that in all of that time, the defendant had only had one other prosecution under the Act (in 1999, when a penalty of $6,000 had been imposed) and a penalty of $500 in 1997 under the Dangerous Goods Act 1975, in relation to a fire, the cause for which had never been established. It had never been prosecuted for any safety offences in the other States where it operated.

12 It would also be accepted, so it was submitted, that the defendant had not turned its back on safety matters. There was both oral and documentary evidence as to its approach to safety and training, which would be taken into account.

13 It was also submitted that in assessing penalty it would be accepted that this was a relatively small concern, a family company operated by Mr Bradley and his wife as sole directors and shareholders for many years, generating relatively modest returns.

14 It is unnecessary here to repeat the well established approach which must be adopted to the proper assessment of penalty in cases such as this. The starting point is the nature and quality of the offence in question. Here, the defendant has been found guilty of an offence under s15 of the Act, as to its failure to provide or maintain a safe system of work in relation to the removal of bitumen spillage from the external surface of a processing vessel. The detailed findings in relation to the offence appear in the earlier judgment. I do not repeat them here.

15 On the evidence a number of deficiencies were found in the system established for this cleaning work, which a trainee and a supervisor were performing alone together at night. They included the approach the defendant adopted when requiring its employees to perform this work, which involved them working with a naked flame on top of the vessel being cleaned, in potential proximity to flammable vapours, when that was a well known safety risk, even if the vessel was cold; the failure to adequately warn or train employees in relation to such risks; and the adoption of a system whereby the presence of such flammable vapours was detected by employees by smell.

16 In assessing penalty it is necessary to have regard to the potential consequences of the defendant's failures, not just what actually resulted. In this respect, the offence was not one at the higher end of seriousness or indeed even the mid-range, as submitted by the prosecutor in Boral (No 2). Nevertheless, while there were relatively minor burn injuries suffered by only one of the employees involved, the potential consequences of an explosion of sufficient force so as to cause the closed hatch of the vessel to blow off, hit the roof above the workers cleaning the vessel and then to fall upon one of them, could plainly have been more serious than it fortunately was.

17 I am satisfied that in the circumstances the offence cannot be regarded as just a minor one. I also accept, however, that the circumstances before Hungerford J in Boral (No 2), cannot provide suitable guidance as to the appropriate penalty in this case. The circumstances there in question are considerably different to those which here arise.

18 This case is concerned with the cleaning of cold, solidified bitumen from the outside surface of a cold, relatively empty vessel at a factory site, which resulted in a short, sharp explosion as the result of contact between a naked flame and what can only have been a relatively small amount of flammable vapours present in the vessel, given the nature of the resulting explosion. In Boral (No 2), consideration had to be given to a large explosion, caused when an employee inserted a dipstick into a tanker containing molten bitumen being sprayed onto the surface of a road, after the spray lines were cleaned under pressure with a solvent. This caused a significant amount of flammable vapours to be created, which engulfed the employee who measured the bitumen level, resulting in very serious burn injuries. Both the work involved and the potential consequences of the risks created in the two cases were plainly quite different. There were a variety of other relevant distinctions between the two circumstances, which it is unnecessary to elaborate further upon, given the view I have formed as to the assistance which the decision in Boral (No 2) is able here to give, in relation to the question of the sentence appropriate for this offence.

19 In determining penalty, I accept that regard must be had to the nature of the defendant's operation and in that context, its record. That record can properly be accepted as being a good one, given the nature of this industry, which, on any view, involves hazardous operations.

20 I also note the submissions made as to the defendant's attitude to safety matters and the fact that safety was not just here ignored. Nevertheless, I must conclude on all of the evidence about these matters, that the defendant's approach to safety matters was less than adequate in the circumstances and plainly required attention.

21 As to the size of the defendant, I do not accept that it was the type of operation which would warrant the adoption of the approach discussed in Mauger v Krcmar Engineering Pty Ltd (1993) 47 IR 359. Nevertheless, on the evidence it can well be accepted that it was a relatively modest operation. I have taken those matters into account, as I must, having regard to the provisions of s6 of the Fines Act 1996.

22 The evidence established that the nature and quality of this offence must be accepted as having involved a relatively foreseeable risk to safety. This follows inevitably from the intersection between the defendant's approach to the training of both the trainee employee and the supervisor in question; the work method adopted for this particular cleaning job, involving as it did the use of a naked flame to assist in the removal of solidified bitumen on the outside surface of the vessel, where flammable vapours might be present and the method of detecting the presence of flammable vapours which the defendant had in operation. Given the maximum penalty here available and having regard to the other matters earlier mentioned, such as the defendant's prior record and its size and operation, I have concluded that a penalty of $80,000 is appropriate in all of the circumstances of this offence.

23 Mr Chin submitted that as to costs, the correct approach was that discussed by Marks J in WorkCover Authority of New South Wales (Inspector Fielding) v Capral Aluminium Limited [1999] NSWIRComm 48 (23 February 1999), where his Honour considered the interaction between s181 of the Industrial Relations Act 1996 and s202 of the Legal Profession Act 1987.

24 For all of these reasons, the defendant is found guilty of the offence as charged, except as to particular (a) of the charge. The defendant is convicted and is fined an amount of $80,000, with a moiety to the prosecutor. The defendant is ordered to pay the prosecutor's costs as agreed or in default, as fixed by the Court. ------------------------

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